Analysis of Transactions

Need help with your homework? Look no further! Our subject experts are ready to effortlessly handle your assignments, so you can finally say goodbye to stress and hello to top grades.

Please enable JavaScript in your browser to complete this form.
Click or drag files to this area to upload. You can upload up to 3 files.
Get a response in under 15 min

The three accounting terms like that of- assets, liabilities and capital, are regarded as the constituents of business transactions. Not only are these terms inter-woven, but inter-related too. However, these terms can be further explained.

  1. Assets

Assets signify the total valuable things which are owned by a company. The expenses borne by a company for acquiring these valuable resources in its business are also known as assets. These assets are a form of one-time investments with a prolonged future usage. These assets are in no ways meant for sale. Further, these assets play an important role in the profit earning capabilities of a company.

There are various assets like-

  • Cash at bank
  • Cash in hand
  • Investments
  • Plant and machinery
  • Goodwill
  • Land and Building
  • Furniture and fittings
  • Book Debts or Sundry Debtors
  • Closing Stock
  • Tools and Equipment
  • Patents, trademarks, etc.
  • Bills Receivable
  • Accrued Income
  • Prepaid Expenses
  1. Liabilities

Claim put up by proprietors and creditors against various assets of a company are known as that organization’s liabilities. These liabilities are even known as claims or equities. Thus, the term liability can be defined as the claim put up by outsiders against a particular company like the creditors of various expenses and goods. It is the account of which an organization remains indebted for certain time duration to its investors and outside parties.

Some of these external liabilities are listed as follows-

  1. Creditors for goods
  2. Creditors for expenses
  3. Other liabilities.

These can be further explained as-

  1. Creditors for goods
  • Bills payable
  • Sundry creditors
  1. Creditors for expenses
  • Unpaid Wages to Workers
  • Outstanding salaries to employees
  • Due rent left unpaid
  1. Other liabilities
  • Overdraft or bank loan
  • Debentures
  • Partner’s loan
  • Employees Provident Fund
  • Loan from Financial Institution like IDBI, IFC, etc.
  • Workmen’s Compensation Fund

The liabilities of a business organization keep on changing. The values of these liabilities continue increasing or decreasing. In case, of an increase in liability, that company needs to pay more while in the case of a decrease, the company has to pay a lesser amount.

  1. Capital

Capital means a proprietor’s monetary entitlement against the various assets of his company. When the business is run by one owner, the whole capital needs to be contributed by him only. However, if a business is a partnership, its capital is funded by its partners. In the case of companies, it is the shareholders who contribute for the company’s capital.

Not only do these owners act as entrepreneurs of their business, but they are even the sponsors of the business capital. In return, they get profits for the risk taken in their business. If a particular amount of profit remains undivided or kept aside as funds and reserves, it is even known as the owner’s claim. This claim of the proprietor can be described as under-

  • Capital
  • Interest on Capital
  • Profit or retained earnings
  • Reserve fund, general reserves

Accounting Equation

Description 

The business transactions of a company are always financial in nature. Thus, every business transaction of an organization affects the financial position of that business. Each of these transactions either decreases or increases the assets, the liabilities or the capital. Each business has got certain assets of its own. These assets are bought with the capitals which have been supplied to the company by its owners or creditors. No matter in which form the funds of creditors and owners are in, they build up assets of a company.

Analysis of transactions

For instance, if a company receives $ 2,00,000 as its capital from the owner and then retains the amount in the firm, it will form to be an asset of- ‘cash in hand.’ Among this, if $50,000 is deposited in the bank, then the capital structure will be divided. The total capital of this firm will be denoted by two assets like-

  • Cash in hand of $ 1,50,000 (a sum of $50,000 being deposited at the bank out of its entire capital of $ 2,00,000.)
  • Cash at bank of $50,000

If this company now purchases furniture of $ 20,000 and pays it from that cash deposited at the bank, then its capital structure will again change. It will be like-

  • Cash in hand of $ 1,50,000 (a sum of $50,000 being deposited at the bank out of its entire capital of $ 2,00,000.)
  • Cash at the bank of $ 30,000 (since furniture worth of $20,000 was bought, its bank balance has come down by $20,000.)
  • Furniture of $ 20,000

Accounting equations are a declaration of equality between a company’s total debits and credits. With the example depicted above, it can be stated that the capital of a company is always equal to its assets.

An increase in capital will automatically lead to an increase in the value of assets of a company. Similarly, a decrease in the value of capital will decrease the value of these assets. If the owner withdraws money for his personal use, that results in a decrease in assets’ value. For example, if he withdraws a sum of $10,000 from the cash at bank or reserves, then the valuation of his company’s assets will also decrease by $10,000.

Liability of creditors in Accounting Equations

It is widely accepted that a business does not have any asset or liability or capital of its own. The business receives sponsor ships from its owners and creditors. It keeps these in the form of several assets. This justifies that liabilities + capital is always equal to that of its assets. This can be denoted in the form of accounting equation as follows-

Analysis of Transactions_1

 

Links of Previous Main Topic:-

Link of Next Accounting Topics:-

Homework Blues?

Get expert help with homework for all subjects.

  • NPlagiarism-free work
  • NHonest Pricing
  • NMoney-back guarantee

Latest Reviews

Solved Sample Works

Accounting Homework

Corporate Accounting Sample

Biology Homework

Genetics Assignment Sample

Essay Writing Help

Business Plan Sample

Homework Help FAQs

Our Answers to Your Questions

How do I submit my homework?
K
L

Getting homework help is very simple with us. Students can either send us the homework via email or they can upload it to our online form here. For a quicker response, You can also chat with us at WhatsApp and submit homework directly. You are sure to get a response from our side within 10 minutes.

How much will my homework cost?
K
L

The cost of paying someone to do your homework varies depending on the service and the type of assignment. We have listed our standard pricing plans for popularly used writing services. For other kind of assignments, You can get a free instant quote from us using our online form.

We also accept partial payment to start working on your assignment help. You can pay the remaining amount when your task gets completed. No pressure of up-front payment. No hidden order costs.

Can I receive help with my homework anytime?
K
L

Yes, you can receive help with your homework anytime with us. Our online homework help services are available 24/7, allowing you to receive assistance with your homework anytime, anywhere.

For urgent homework requests, reach out to us through our LiveChat or WhatsApp channels and one of our friendly support agents will assist you in finding the right expert for your online homework help request immediately. With our services, you can rely on 24/7 availability and meeting deadlines.

Are online homework websites budget-friendly for students like me?
K
L

Yes, Our Online Homework Help websites are an affordable solution for you as a student. Compared to traditional tutoring services, MyHomeworkHelp prices their homework help services honestly and within the budget of college students. This makes it easier for you to receive assistance with your homework without breaking the bank.

What is your plagiarism-free policy?
K
L

At myhomeworkhelp, we take plagiarism very seriously and ensure that all solutions provided by our tutors are original and authentic. Our tutors are trained to provide custom-made solutions, tailored specifically to meet the requirements of each student. We do not provide pre-written papers. All our homeswork solutions are made from scratch, guaranteeing 100% orignal homework answers.

Additionally, we have strict plagiarism-detection tools in place to check all submissions for authenticity.

Is using an Online Homework Help Service cheating?
K
L

Using online homework help services is not equivalent to cheating. Our services are intended to support students with their homework and provide them with the resources they need to succeed academically. With the help of our online homework help services, students can receive immediate assistance with their homework from any location, at any time.

At myhomeworkhelp, we are committed to promoting academic integrity. Our tutors provide solutions that serve as guides for drafting your own work. It is not acceptable to submit someone else's work as your own, as this constitutes academic plagiarism.

Can I chat with my tutor?
K
L

Using our secure chat board, you can now chat directly with your assigned tutor. The chats are encrypted both ways to secure your privacy. This makes your contact with the tutor directly & confidentially, so you can better explain any requirements or changes if needed or just need updates.

You can't contact the experts outside of chat board platform. Sharing any personal information, including but not limited to contact information, goes against our Terms and Conditions and therefore may result in permanently blocking you from the platform. We take any personal data very seriously and we do it for the safety of our users.

Know more about chat board here.

What is your money-back guarantee policy?
K
L

It’s worth noting that our online homework help service rarely leads to disappointment among students. Our expert tutors, along with our support and quality assurance team, are dedicated to providing the best possible experience for our customers. However, if for any reason a student is unsatisfied with their homework help solution, we offer unlimited revisions until they are fully satisfied.

In the rare event that a student remains unsatisfied even after revisions, we offer a money-back guarantee. We want all of our students to feel confident and secure when they turn to us for assistance with their homework, and this guarantee is just one way that we demonstrate our commitment to providing the best possible service. If you have any concerns about our services or the quality of the work you receive, please contact us for support.

What is the expertise of the tutor assigned to do my homework?
K
L

At myhomeworkhelp, we take pride in our team of qualified and experienced tutors. All of our tutors undergo a rigorous selection process and are required to have a minimum of a master's degree in their respective fields. Additionally, they must pass a series of tests to demonstrate their proficiency and ability to deliver quality work. We believe in transparency and providing our clients with the best possible service. You can be confident in the expertise of the tutor assigned to do your homework.

What about privacy & confidentiality?
K
L

Using My Homework Help is absolutely safe. We care about your security, therefore we encrypt all personal data to make every user feel safe while using our services and we don’t share any personal information with any third parties without your permission. Your credit card information is not stored anywhere at My Homework Help, and use of PayPal relies on their secure payment networks. Your identity, payment and homework are in safe hands. You can always be certain of getting professional help and remaining anonymous, while using My Homework Help.